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September 2016
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September 2016
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Newsletter Article

Game-Based Learning Market Accelerating Globally


There is now clear longitudinal evidence that game-based learning is gaining traction across the globe.  According to The 2016-2021 Worldwide Game-Based Learning Market, a report released August 2016 from Ambient Insight, worldwide revenues for game-based learning products reached $2.6 billion in 2016. The study reports that the global five-year compound annual growth rate (CAGR) is a robust 22.4 percent, and predicts that revenues will surge to $7.3 billion by 2021.

“This is a relatively unusual trend for a learning technology that has been on the market for decades and indicates a new phase of market demand,” says Sam S. Adkins, chief research officer for Ambient Insight. 

10 Types of Edugames

In Ambient Insight's Research Taxonomy, game-based learning is defined as a knowledge transfer method that utilizes "game play" comprised of some form of competition (against oneself or others), increasing levels of complexity, and a reward/penalty system that essentially functions as an assessment method. Game-based Learning is often linked to the constructivism theory of education, defined as the process of experiential learning, discovery learning, and situated learning. 

To be classified as an education game, a product must implement game play as a method to achieve knowledge transfer, also known as behavior modification. Behavior modification is a fundamental component of learning theory. Learning and behavior modification are synonymous; behavior modification is identical with structured learning. Ambient Insight is the only research firm that has developed a precise pedagogical framework for educational games. 

Ambient Insight's Learning Taxonomy identifies 10 distinct types of game-based learning products, each of them with unique pedagogical characteristics that map to specific learning theories, domains in Bloom's Taxonomy, and Gagné's Conditions of Learning. The 10 types of edugames are: 

  1. brain trainers (emerged in 2006, second-generation products hit the market in 2015)
  2. knowledge-based games
  3. skills-based games
  4. language learning games
  5. early childhood learning edugames
  6. assessment and evaluation edugames
  7. experiential role-playing edugames
  8. location-based learning edugames (emerged in 2009)
  9. mobile augmented reality edugames (emerged in 2010, faded in 2012 and 2013, and re-emerged in 2015)
  10. virtual reality edugames (immersive types emerged in 2015). 

    The edugame framework provides suppliers with a precise method of identifying revenues and a concise instructional design specification for developing profitable edugames. Ambient tracks global revenues generated by each type of edugame across 122 countries.

    Catalysts for Growth

    In The 2016-2021 Worldwide Game-Based Learning Market, Ambient identifies six primary convergent catalysts driving the worldwide market:

  1. rapidly fading resistance to learning games in the corporate and academic segments
  2. growing body of empirical evidence on the effectiveness of game-based learning
  3. high degree of product substitution as buyers migrate away from legacy learning technologies to serious games
  4. growing international popularity of brain trainer games
  5. spike in demand for early childhood learning apps
  6. strong demand for language learning apps (particularly English and Chinese). 

Although the use of learning games has long been a staple in first responder and military organizations, there has been a history of resistance to edugames in the corporate segment, and to a lesser extent in the academic segments. However, the major inhibitors that previously dampened the widespread adoption of game-based Learning are now fading fast. 

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“Until recently, game-based learning was perceived to be incompatible with the corporate culture and very time consuming and expensive to develop,” says Adkins. But data from the report finds that this has changed dramatically in just the last two years. In particular, game-based recruiting and job application assessments are rapidly gaining traction in the corporate segment and creating the breakthrough moment for the uptake of game-based learning by corporations and businesses. 

What’s more, several of these new learning products use sophisticated psychometrics that yield statistically sound quantitative learning results. “The science of psychometrics is the core measurement method used in all the major professional certifications and this is the game type that has overcome the corporate resistance,” explains Adkins. 

Proof of the growing corporate demand for game-based learning can be found in the success of corporate-facing companies. For example, Spain-based Gamelearn, which was founded in 2008, reports spectacular results. It increased website traffic 10-fold, developed a new product launch plan, and its client list includes well-known companies like Burger King and Hyundai. One factor the company cites for its growing success is a 90 percent completion rate among their clients. This is extraordinary considering the notoriously high dropout rates (50 to 70 percent) for legacy learning technology products like self-paced e-learning. 

And this type of success is prompting interest among investors. Ambient reports that one corporate-facing game-based learning company called mLevel obtained $5 million in funding in July 2015. Another new entry to the market, GamEffective, garnered $7 million in private investment in June 2016. Both of these companies boast dozens of high-profile clients, including Microsoft and Yahoo! that use their product for product rollouts, sales training, employee alignment, and customer service.

Leapfrogging Legacy Tech

The term “product substitution” is used in the product market analysis industry to describe the demise of one product due to the preference of substitute products. The most cited examples are the replacement of print-based encyclopedias with digital repositories and the decline of the film-based camera industry in favor of digital cameras. 

Ambient reports that three factors that contribute to product substitution are lower-cost substitutes, higher quality in the substitutes, and low "barriers-of-switching" to the substitute. “In the global learning technology industry, all three of these factors are now present and a pronounced degree of product substitution is underway, particularly in mobile-only countries,” says Adkins. 

Low-cost game-based learning technologies with highly-effective knowledge transfer methods are now flooding the market.  For example, the deployment of tablets in digitization initiatives is a factor contributing to product substitution. So far, the largest national deployments of tablets in the schools in Asia are in South Korea, China, Malaysia, and Singapore. Each of these countries are deploying the tablets differently, usually starting the process at specific grade levels. 

“Clearly, the learning technology industry has entered a new phase characterized by products that are more effective than legacy products. These products are far more advanced and significantly more effective than traditional courseware, textbooks (digital or otherwise), or web conferencing. The current phase of product substitution will continue unabated for the near future,” says Adkins. 

For more insight into trends of the edugame market, download The 2016-2021 Worldwide Game-Based Learning Market.

About the Author

Ryann K. Ellis is an editor for the Association of Talent Development (ATD). She has been covering workplace learning and performance for ATD (formerly the American Society for Training & Development) since 1995. She currently manages ATD's Community of Practice blogs, as well as ATD's government-focused magazine, The Public Manager. Contact her at rellis@td.org. 

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